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Private lenders invited to finance transit projects
The government has officially invited private lenders to participate in financing the construction of three transit oriented developments (TOD) in the country’s maiden light rail transit (LRT) project
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he government has officially invited private lenders to participate in financing the construction of three transit oriented developments (TOD) in the country’s maiden light rail transit (LRT) project.
The Cibubur-Bogor track, which is part of the second phase of the LRT construction, will be offered to private sectors as it offers — according to a study by financial consulting firm PricewaterhouseCoopers (PwC) — an interest rate of return at 10 percent.
“The TOD developments in Bogor-Cibubur will be directly offered to the private sector, and probably Depok and Cikeas [West Java] in the future,” Coordinating Maritime Affairs Minister Luhut Pandjaitan said on Monday.
State-owned railway operator PT Kereta Api Indonesia (KAI), he continued, would still handle the construction of train stations and the 38.5-kilometer railway, which will connect the Cibubur-Bogor, Dukuh Atas-Palmerah-Senayan and Palmerah-Grogol routes
State-owned construction company PT Adhi Karya director Budi Harto said that of the possible projects to be auctioned, 50 hectares of land near LRT depots could be utilized by the private sector to build housing or retail outlets near the LRT.
Ahmad Najib Tawangalun, KAI’s head of LRT division said his team would coordinate with Adhi Karya to review the location and layout of the stations.
“We are still coordinating with the Transportation Ministry and Adhi Karya, because no matter what the initial design is, if deemed unfit, we can move [the stations] to a more strategic place,” he said.
Transportation Minister Budi Karya Sumadi said several banks have expressed interest in joining the financing scheme through syndicated loans, which would be led by Indonesia’s biggest state-owned lender by asset, Bank Mandiri.
“I heard from Bank Mandiri that Bank CIMB Niaga and BCA have considered to join,” he said.
Responding to the report, PT Trimegah Securities analyst Angga Aditya Assaf warned that not all private banks had the capacity to disburse loans for megaprojects. He pointed to CIMB Niaga, whose loan to deposit ratio (LDR) reached 101.69 percent in June, meaning that it was barely able to disburse large financing.
“CIMB Niaga is already over disbursed, it does not have enough third party funds to allocate to the project,” he told The Jakarta Post.
As for BCA, Angga continued, it had the adequate capacity to disburse such a loan as its LDR was still at 74.49 percent as of June.
“BCA’s playing field is in corporate loans. I doubt it will join the LRT project quickly,” he said.
According to its second quarter financial report, BCA booked Rp 433.61 trillion (US$32.54 billion) in outstanding loans, 37.07 percent of which went to corporate loans, 34.21 percent to commercial and small and medium enterprise (SME) segments, and 28.72 percent to consumer loans.
The LRT project is estimated to serve up to 476,000 passengers, with the growth rate of above 5 percent per year. The first phase of the project — spanning for 43.3 km from Bogor in West Java to Jakarta — is expected to be completed in 2019 at the latest. (dis)
